China’s largest jewellery retailer backs mined diamonds

Chow Tai Fook 

The Natural Diamond Council (NDC), which groups the world’s seven leading diamond producers, has inked a deal with China’s top jewellery retailer Chow Tai Fook to boost demand for mined rocks in the Asian market.

The partnership, the trade organization’s first collaboration with a retailer, seeks to attract young Chinese customers to naturally produced diamonds.

It also comes as Chow Tai Fook, which has more than 4,500 stores in East Asia and the United States, plans to expand its global footprint.

“One of our key priorities this year is to work closely with natural diamond retailers to protect and convey the authentic and unique beauty of natural diamonds together,” David Kellie, CEO of the Natural Diamond Council, said in the statement.

“I am confident that this partnership will solidify the values of and forge consumers’ desire for natural diamonds,” Chan Sai-Cheong, managing director (Mainland China) of Chow Tai Fook Jewellery Group added.

Earlier this month, the world’s biggest jeweller Pandora dealt a blow to diamond miners by announcing it would no longer sell mined gems, but exclusively man-made ones.

Since 2011, when prices peaked thanks to China’s younger shoppers, diamonds have faltered. Lab-grown stones, initially priced confusingly close to the real thing, posed a challenge.

The NDC, until 2020 known as the Diamond Producers Association, focuses on marketing mined rocks and its funded by its members: ALROSA, De Beers, Dominion Diamonds, Lucara Diamond, Petra Diamonds, Rio Tinto and RZM Murowa.


D1 Mint buys 1500 investment quality diamonds for new diamond backed crypto coin

investment grade diamonds

The emergence of blockchain technology is helping to turn diamonds into a new investment asset class that in turn, could drive future demand for natural diamonds, the creator of a new diamond backed crypto coin said on Friday.

Singapore based D1 Mint Limited, the creator of the diamond backed D1 Coin, announced on Friday that it has signed a purchase order with diamond cutting and polishing company KGK Diamonds to start its diamond reserve with 1 500 investment-grade diamonds delivered by Russian diamond producer Alrosa, valued at close to $20 million, and which are deposited at a vault in Antwerp, Belgium, the global centre for the diamond trade.

“Today we made a huge step forward in the development of D1, a project started a year ago to create an asset backed token and to make diamonds an investable asset class,” D1 founder Hogi Hyun said.

The purchase order is meant to establish a reserve for digital tokens backed by gem quality diamonds certified by the Gemological Institute of America (GIA). Each D1 Coin is pegged to the value of a fraction of an authentic, natural diamond, as determined by the proprietary pricing algorithm, the D1 Matrix.

According to D1 Mint, diamonds are an ideal asset backing for a coin since they are rare, taking a billion years to develop, and have several millennia of history as a recognised store of wealth and value.

The diamonds in the D1 reserve will be sent to GIA in New York to be graded, laser-etched and packed in tamper proof packaging, before being shipped to secure vaults in Singapore and Switzerland. Logistics and warehousing are provided by established specialists such as Brinks and Malca Amit, while insurance is provided by Lloyds of London.

Further, D1 Coins provide users the ability at any point in time to select specific diamonds from the diamond reserve and convert their tokens into diamonds at a fixed price determined by D1 Matrix. D1 Coins provide a direct exposure to the price of diamonds, opening a new asset class to investors globally. In addition, as an asset-backed token, the D1 Coin provides an excellent means of exchange and store of value in the crypto markets.

Alrosa noted that the approach taken by D1 “will succeed in making natural diamonds an investment asset class attractive to various investor groups, drive higher demand for natural diamonds and support further growth of the diamond industry in Russia”, Alrosa board member and D1 advisory committee member Alexei Chekunkov noted.

“The convenience of blockchain will help turn diamonds into a respectable investment asset class that in turn will drive future demand for natural diamonds.”

Independent New York diamond analyst Paul Ziminisky noted in comments to Mining Weekly Online that the potential for new diamond demand is there, but blockchain does not necessarily address the traditional challenge of investing in physical diamonds with its fungibility, or lack thereof.

“I think the success of products like these will rest on the reputation of the funds and the custodians, for example, confidence that the underlying asset is accurately reflected in the coin. This can be mitigated somewhat with auditing.”

According to him, gold has done quite well in securitised form, and he believes that this is in part due its fungibility, and the simplicity that comes with that. “So gold has a natural advantage relative to diamonds as a securitised physical investment vehicle in that sense.”

“In general, I see securitised forms of physical commodities more as trading vehicles than investments. I think the inherent desire to hold physical diamonds as an investment, or as a store of value significantly rests in the desire to physically possess the asset,” Zimnisky commented.

Source: miningweekly